Tag: investment

“Past performance is not a reliable indicator of future performance”

Crypto hedge funds are part of a larger group of crypto funds, including those based on venture capital and private equity. Grouped together, there are currently 622 crypto funds across all categories, 303 of those being crypto hedge funds, which represent assets of less than $4 billion, according to the research. Half of the funds are based in the U.S., multiple launches have been seen in Australia, China, Malta, Switzerland, The Netherlands and the U.K. this 2018. 2017 was a great year to start a crypto hedge fund. Great returns!Is it hard to perform in bull markets?
2018, on the other hand, has seen a significant downturn in many of the cryptocurrencies. Many of these coins make up a strong percentage of most of the crypto hedge funds. So-called ‘diversified portfolios’, or ‘risk mediation in coin-bundles’ underperformed greatly. Investors money is still tied-up unless sold at loss. With YTD 2018 Returns of -56.78%, investors consider alternative option within this disruptive, high growth technology space.

Historical Monthly Performance (%)

Reasons?
Cryptocurrencies are speculative in value.
By now, most should know that the majority of token and coins stand and fall with Bitcoin performance due to strong correlations. Additionally, with an average of 50% of the total crypto market share, Bitcoin is certainly the dominant driver in overall behavior. Furthermore, crypto is a young asset class and will likely continue to be volatile as it matures. Even the volatility of equities, currently at 13.4% from the VIX, is completely dwarfed by that of Bitcoin, coming in at 70% (down from 150% earlier in the year).
Total market capitalization rose from $18.3B at the start of 2017 to $613B by the start of 2018 — over 3000% growth. The market for cryptocurrencies is rapidly changing, presenting huge opportunities for investors, and in turn, investment managers. But, individuals looking to capitalize on the inefficiencies of the market by offering interests in actively managed hedge funds need to be wary of and disclose the associated risk.

Crypto Correlation Matrix

Bitcoin Dominance

Volatility: 12th Apr 2018 — A move of $1200 within an hour

Bitcoin Crashes (or bubble bursts or correction)

Some context for the know-it-all

And now….?

Due to the 70–90% corrections from all-time highs in 2017, a majority of crypto funds will most likely not make any performance fee this year, despite their “complex hedging strategies” or automatically re-balanced functions.
This means they have three (no, 4) options for the rest of the 2018 fiscal year. They can:

Raise New Capital,

Ride the market out and hope 2019 is better,

Close the fund

or change strategy.

“Cryptocurrency cannot be analyzed in the same manner as traditional assets.”

There is no physical item or stake in the startup or company to which the price is tied. The valuation of your token is based on the expectation of future demand and is thus very susceptible to changes in sentiment.
Hedge funds are the most common type of digital asset fund, but venture capital crypto funds are launching quickly, and existing tech/FinTech VC firms are expanding investments into blockchain startups and launching their own blockchain funds. Investing in technology startups — instead of solely relying on price appreciation of existing crypto-assets — serving investors the most disruptive, high growth market, worth trillions in the future.

2019: The year of ?

We are approaching the end of January and there have been plenty of predictions of what this year could mean for cryptocurrencies. Some claimed that this could be the year for security token offerings (STO), some say it could be the year mass adoption will finally take place. My thoughts on the matter is, 2019 could be the year when regulations finally build an infrastructure for cryptocurrencies or blockchain-based projects to thrive. The road is long but nothing can stop innovation. It is the single most consistent growth humanity has offer since maybe the dawn of time.Source: Crypto Fund Research, Eurekahedge, Sifr Data, Alpaca Securities

About The Author

Iliya Zaki is Head of Business Development and Marketing for Moonwhale Ventures, a Singapore-based consultancy firm offering Blockchain Business Consulting services and also building a blockchain-based Investment Platform.

ICOs are a great way for startups to raise initial capital for their crypto based business opportunity. It has all the benefits of blockchain technology embedded into it; it’s decentralized, borderless, and trustless and is quick.
Cryptocurrency development companies first need to prepare a B-Plan (Business Plan) which includes the project summary, purpose of project, benefits after project completion, amount of money to be raised and minimum amount of funds that is required by the company, for how long ICO campaign would run. After the campaign starts, their supporters and other people who are interested buy some crypto coins called as ‘tokens’.
For IPO’s these tokens act as shares of company. And then people from these supporters buy the ERC20 token coins for the same reason. At the end of campaign, they measure it. If the amount of money raised met the minimum amount (required by company) within specified campaign time, then that money raised is used for their required purpose but if the campaign became unsuccessful then raised money is returned to the backers.
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FIVE TIPS TO IMPROVE YOUR FINANCES: A MINI GUIDE

Personal finance management is something that we don’t learn since our childhood, nor is it taught in schools. But it is something that we must learn as soon as we start growing up, as it is something we have to deal with all our lives!
Here are a few simple tips that will hopefully guide you to manage your finances.

Spend Less than You Earn

It may sound very cliché, but this is the most straightforward hack ever. You should always spend less than you earn. Most people don’t stick to this rule, but it’s very simple. For instance, you make $1000 per week, and if you spend $1200, you won’t be able to save for your future, or maybe pay your bills, get full grocery, or anything at all. It’s a lousy way to live. But sadly, life is not as simple as defined. It’s very effortless to slip in a hole without knowing it. Sometimes an unexpected car bill can make you spend extra, or sometimes you can have a surprising visitor come stay with you!
However, you can always at least plan on investing, and maybe in the more extended period, you can ask for a pay raise, or even pursue towards a higher paying job! Spending less is all about your mindset. Reducing your expenses is one of the easiest methods of sorting your finances.

Stick to Your Budget

If you do, or if you don’t have any debts, you need a budget anyway. Making a budget is more convenient than actually sticking to your budget. Many simple things that can help us keep on track. A few are:

To keep your receipts and write them down at the end of each day. It gets easier to track and calculate.

Whenever you have the urge to buy something, ask yourself, “Do I really need this?” It will help avoid compulsive buying.

Stop shopping at pricey stores. If you want a t-shirt, go to the store that offers it for $10, instead of $40.

Use every last bit of everything you use. Make sure to finish every last bit on your plate and not throw it away.

Do right amount of research before you go and buy anything important or expensive.

Always save. Take out 20% off of your salary before you make your budget and pay your bills.

Invest

If you want to be wealthy, you should invest! And you should invest early, often, and as much as you can manage. But some people don’t prefer spending to invest because they think they need a lot of money for it. That’s where people are wrong. You can start investing with as little as $20! The key is to be persistent and save wherever you can. Here are some tips that can motivate you:
– Try the cookie jar approach. Try putting whatever you have collected during the day in an envelope or a jar, and try doing it every day. Try to make this a habit, even if you have $2 at the end of the day, put it in your savings jar.
– Start from small, like index funds, betterment funds, and mutual funds.
– Later move on to real estate or dividend stocks.
– Enroll in your employer’s retirement plan. You can start with investing just 1% of your salary every month.
– Go to Bitcoin Investment Program. Bitcoin is digital currency and also has low transaction fee!

Emergency Funds

Let’s face it, unexpected financial problems can arise anytime, and it’s not easy to avoid them too. So, it’s always a good idea if we have some savings to help us when our car breaks down, or our washing machine stops working, or even if we lose our job for any reason.
Another benefit is that emergency funds also help us clear our debt. Emergency funds help you with unexpected spending so you can pay off the debts (if you have any).

Good Insurance

Insurances can be your best friend! They are always there to take care of things you didn’t plan for. Three most essential insurances everyone must have are Car-Insurance, Life Insurance and of course, Health Insurance.

Car-Insurance

Almost all states require having a minimum amount of car insurance. It provides benefits when an accident occurs, it covers lawsuits and legal fees, and it covers vehicle repair dues as well. Car insurance also include the damage caused by accidents like theft, fire, etc.

Life Insurance

First off, if you are the one who is earning for a family, or if some of your family depends on you, you need insurance because if you die without an insurance, it can create a lot of problems for the ones depending on you. These may include income issues, debts, bills, etc.
Life Insurance these days is extremely affordable, and you have the flexibility to choose any company and whatever insurance plan that suits you. You are the one who gets to decide the duration, coverage, beneficiary, etc.

Health Insurance

Health benefit is also significant when you are trying to manage your financial life. Many people say “why do we even need health insurance?” I’ll tell you why. Insurance companies are an expert on negotiating with hospitals and their crazy bills. Negotiations between doctors and hospitals are standard, and they can reduce our bill up to 50%!
When you have health insurance, you can avoid those long waits at the ER. With health insurance, you can directly go to your primary care physician, and cut the waiting line and get yourself fixed at the initial stage only. These are of course few of many benefits, but I find these convincing enough!
Hopefully, this mini guide of mine helps you to solve and sort your financial life. Happy Financing!

AUTHOR BIO:

Sarah Smith has been a personal finance author for the last five years. She is also, an independent and very passionate finance and investment advisor. She regularly posts at PersonalIncome.org

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